My guess is TD is a part owner and The Quarterback is arguably the top spriner he and his mates have owned.

I wish - THE QUARTERBACK is one of our favourite horses.

The article was from the Herald Sun, which is obviously an us vs them thing. Pretty sure the "our" refers to Victoria, though you would think MALAGUERRA would be Victoria's best sprinter. I think they are earned about the same in prizemoney now though.

But PP you or I can go to the MM and spend a small amount for a share and get in on the ground level. The only exclusion to that race series is where the horse was brought from.

The entry fee is well beyond the reach of the vast majority of owners / horses.

The vast majority of owners/horses wouldn't make the field. Those considered have probably won a fair bit of prizemoney already.

Anyway, I think a few of you need to familiarize yourself with the format. I don't think the rules are what you think it is:

Twelve slots will be sold in The Everest through an expression of interest entitling the owner of the slot an entry in the field. The owners of these slots will be able to trade their position or alternatively partner with owners not holding a slot to enter a horse in the final field for the race.

The vast majority of owners/horses wouldn't make the field. Those considered have probably won a fair bit of prizemoney already.

Anyway, I think a few of you need to familiarize yourself with the format. I don't think the rules are what you think it is:

Twelve slots will be sold in The Everest through an expression of interest entitling the owner of the slot an entry in the field. The owners of these slots will be able to trade their position or alternatively partner with owners not holding a slot to enter a horse in the final field for the race.

Trade their position.not so simple .A. You need somebody else to take up your position B. They must be prepared to pay $600,000 C. If you have somebody take up your position after one year, do they then have the liability for the third year ?

"The owners of these slots will be able to trade their position or alternatively partner with owners not holding a slot to enter a horse in the final field for the race."

the most interesting bit is the partnering bit, I guess that means you can buy a slot even if you don't own a horse and then chose someone to partner with for their horse to run and work out a payback split based on the prize money.

"The owners of these slots will be able to trade their position or alternatively partner with owners not holding a slot to enter a horse in the final field for the race."

the most interesting bit is the partnering bit, I guess that means you can buy a slot even if you don't own a horse and then chose someone to partner with for their horse to run and work out a payback split based on the prize money.

Basically, it is Horse Stud Monopoly

Or it is a high stakes gamblers monopoly or no monopoly at all.

Anyway, Unless it receives group 1 status how will it be a Horse Stud Monopoly ?

Quote

Yet another is a 32-year-old Northern Kentucky pizza-joint owner who says he has never before had any investment of any kind in any racehorse ever.

This is basically how the Pegasus worked

08/05/2016 4:07PM

Daring dozen take $1M plunge to win $12M Pegasus World Cup

Kentucky Derby winner Nyquist could be one of the 12 Pegasus World Cup starters.

One is a multiple award-winning owner and breeder who conceived the race and owns the racetrack that will hold it. Another is an ex-trainer who recently made a quick fortune in the ship-repair industry. Another has owned two Kentucky Derby winners, including this year’s victor, Nyquist. Yet another is a 32-year-old Northern Kentucky pizza-joint owner who says he has never before had any investment of any kind in any racehorse ever.

They are all among the motley crew of one dozen individuals or partnerships who have committed to spend $1 million for a starting slot in the inaugural $12 million Pegasus World Cup, scheduled to be run on Jan. 28 at Gulfstream Park in Hallandale, Fla. Put together in a matter of months earlier this year, the Pegasus is the latest brainchild of the billionaire racing titan Frank Stronach, and the race’s current cast of characters are perhaps as unusual as the conditions of the race itself.

Some are well known. Stronach himself bought a slot, through the family-owned racing company he controls, The Stronach Group. Jack Wolf, who was hired by the Stronach Group to run the race, bought a slot as well, through a partnership comprised mostly of investors in the racing partnership he runs. Then there are the owners of the top-class horses California Chrome, Runhappy, and Nyquist, and the principals behind the global racing and breeding operation Coolmore.

Beyond them, there is the newbie pizza-franchise operator, a 32-year-old Michigan native named Dan Schafer. Then there are a handful of racehorse owners who have only rarely played at the top of the sport, and the ex-trainer, Mick Ruis Sr., who recently sold a large stake in a ship-scaffolding company he bought after quitting the game in 2008. All have paid $200,000 so far to buy a slot in the Pegasus starting gate, according to the Stronach Group, with the remainder of $800,000 due in mid-September.

If the race goes off as planned, the Grade 1 Pegasus will be the richest race ever held, with a purse $2 million greater than the $10 million Dubai World Cup. The winner’s share of the Pegasus purse, $7 million, will exceed the entire purse of this year’s $6 million Breeders’ Cup Classic.

However, unlike stakes races offered across the U.S., which typically require owners to put up approximately 1 to 2 percent of the purse to start, with the racetrack providing the rest, the $12 million purse of the Pegasus will be provided entirely by the investors who purchased the starting slots. While a typical Grade 1 stakes gives a horse owner a 40-1 return on the entry fees compared to the winner’s share of the purse, the Pegasus will give the winner only a 6-1 return. Second place will get $1.75 million, third will get $1 million, and every other horse that starts in the race will receive $250,000.

Most uniquely, buyers of the Pegasus starting berths can sell or lease the slots to other people, a feature that has no precedent in racing history. In addition, each owner of a berth will receive a one-twelfth share in the net revenue that the race generates in wagering, sponsorships, and media rights – also unprecedented. Completely separate from the right to start a horse, the initial investors have also been given the right of first refusal to buy a berth for the race in 2018, with the option expected to carry over for every year that it is exercised.

“I thought it was a unique concept to own a race for one day, to own the track, so to speak, to have a hand in all the handle and the media and ads and everything for one race,” said Dean Reeves, a Georgia resident with a small stable whose best runner has been Mucho Macho Man, the winner of the 2013 Breeders’ Cup Classic. “I don’t look at this as a one-shot deal. I’m in for the long term.”

In interviews conducted over the last month, many investors in the race provided similar justifications for buying a berth. While the outsized purse gives some buyers with top-class horses an obvious incentive to buy in, the investors who do not currently own capable horses said that they expected the race to grow into a major event on the international racing calendar, citing its purse, its unusual structure, and the date and location of the race, held in Miami on the weekend between the NFC and AFC Championship games and the Super Bowl.

But those investors, for the most part, also acknowledged that they had little expectation of turning their $1 million berth into a profit, not without a lot of luck.

“We will not be getting back zero dollars, that’s for sure,” said Sol Kumin, in reference to the $250,000 purse guarantee and the revenue-sharing provisions. Kumin is a hedge-fund manager who purchased his first horses in 2014 and bought a Pegasus berth with James Covello, a horse owner who is a partner at Goldman Sachs. “But I could see myself losing 30, 40, 50 cents on the dollar in the first year.”

So why would he purchase a berth, given his partnership’s anticipation of a significant loss, in a sport in which owning horses is already a losing proposition for the vast majority of investments?

“I think this has a tremendous amount of potential,” Kumin said. “In five years this could be the biggest race in the world. Everything kind of fits, with the date and the location. We could be looking back then saying that it was a real good idea to get in on the ground floor. That’s kind of the bet we are making right now.”

Birth of the Pegasus

The path from conception to birth for the Pegasus has been a quick one. Stronach first mentioned the concept behind the race in early January while speaking extemporaneously, as he often does, at an owners’ conference held at Gulfstream. At that Jan. 12 conference, Stronach proposed holding a race with a $12 million purse, with investors purchasing a starting berth for $1 million each and receiving the opportunity to share in the revenue from the race by leasing the track where it would be held.

While the idea seemed far-fetched, officials at Stronach’s company issued a release 24 hours later saying the company intended to pursue the idea. The race then dropped off the radar for several months, but on May 12, nine days prior to the Preakness Stakes at Stronach’s Pimlico Race Course in Maryland, the company made a formal announcement that it intended to run the race under conditions that were in large part along the lines first proposed by Stronach.

According to Stronach officials, interested parties began reaching out to the company about securing a slot immediately after the May 12 announcement. By May 16, the race was sold out, Stronach Group officials said. On May 19, top Stronach Group officials, including Frank Stronach’s daughter Belinda, who had only recently been made chairman and president of the company, appeared at Pimlico to announce the 12 entities that purchased slots.

Paul Reddam, who purchased a slot and owns Nyquist, said that his trainer, Doug O’Neill, had been approached by a Stronach Group official, Tom Ludt, shortly after the May 12 announcement, with Ludt urging O’Neill to get Reddam to buy a spot. Reddam then said he received a call from O’Neill on Sunday night, May 14, about needing a commitment right away.

“It was the classic hard sell,” Reddam said. “It was kind of like buying a house. You’ve been there three or four times, and you like it, but then you get a call that there’s three or four offers on it better than yours, so you jump. We felt we should take one or we won’t get one.”

Mike Rogers, a member of The Stronach Group executive board, said that 14 entities, when including The Stronach Group and Jack Wolf’s group, had indicated that they wanted to buy berths by May 16. Two of the individuals who had expressed interest in buying a slot decided to partner, Rogers said, while the other individual failed to wire the $200,000 that was required to reserve a slot. That left 12.

“The remainder of the week we had significantly more interest, and unfortunately we had to turn them away,” Rogers said, in written responses to prepared questions.

According to The Stronach Group, all of the individuals were required to sign an agreement outlining the specifics of the race. While the individuals interviewed said that they signed the agreement, nearly all of them said they were not familiar with what it contained. The Stronach Group would not provide a copy of the agreement to Daily Racing Form.

Jim McIngvale, the owner of 2015 champion sprinter Runhappy, said that he jumped at the chance to purchase the slot, but he also said he could not provide specifics about what was in the agreement.

“I don’t pay attention to that stuff,” McIngvale said. “I’m not a big lawyer-up guy. I trust Frank Stronach and those guys. I didn’t get in it to get out of it. All I’m thinking about is Runhappy and letting the chips fall where they may.”

The Stronach Group said many details about the running of the race remain to be resolved, including rules regarding scratches. The company is holding a meeting with the berth-holders on Aug. 8 at the Fasig-Tipton Sales Pavilion in Saratoga Springs to discuss some of those details, and it expects to have the rest ironed out by Sept. 15, when the buyers are required to pay $800,000 to fulfill their $1 million obligation under the purchase agreement, Rogers said.

Because of the relatively small size of the racing industry, many individuals in the sport have close financial ties to other industry participants, either through direct ownership of racehorses or breeding stock or through shares in stallions, breeding rights, or foals. With breeding farms in three locations, a far-flung racing stable, and a vertically integrated racing company, Stronach has far more connections than most. And some of the individuals who have purchased berths in the race have very close connections to Stronach.

Reeves, for example, remains a part-owner in Mucho Macho Man, who stands at Stronach’s Adena Springs in Kentucky following Stronach’s purchase of a 70 percent share in the horse in 2014, just prior to the horse being retired. Mucho Macho Man was trained by Kathy Ritvo, the wife of Tim Ritvo, a top Stronach Group official.

Reeves, who said he told Ritvo he would be interested in buying a slot shortly after Stronach spoke at the January conference at Gulfstream, said that he paid cash for the berth he has secured, and that the berth is not financially tied to any other investment he has with Stronach. Reeves is the chairman of an Atlanta-based construction contracting company founded by his father.

“It’s completely separate from all that other stuff,” he said.

All of the buyers interviewed about their berths said that they did not have any partners in the slots other than those announced by the Stronach Group. Rogers, the Stronach Group official, said that The Stronach Group or members of the Stronach family do not have any financial stake in any of the other slots bought for the Pegasus.

However, Rogers also acknowledged that under the agreement for the race, none of the buyers are required to divulge any partners in the berths they have secured, nor are future buyers required to divulge any partners. Rogers did point out that Florida racing rules require the disclosure of any entity with a 5 percent or greater stake in a horse starting in a race. That condition will not kick in until entries are taken for the race, probably four days prior to the Pegasus being held.

Let’s make a deal

There is likely to be quite a bit of deal-making in the run-up to the race. Four of the entities that have secured a berth said they are pointing a specific horse to the race, and the Coolmore partners have shares in a number of top-class horses worldwide, but the vagaries of training and campaigning expensive racehorses often scuttle long-term plans. The owner of the top-class mare Beholder, a three-time Eclipse Award winner, was mentioned by several berth-holders as being a target for a possible sale, but the 6-year-old mare has struggled with injuries in the past, is already worth eight figures as a broodmare, and, in her most recent race on July 30, finished second in the Clement Hirsch Stakes at Del Mar as the 1-10 favorite. On the same weekend, Nyquist, whose breeding rights have already been sold to Darley Stud, finished fourth in the Haskell Invitational Stakes at even money.

Even if all the horses currently being pointed to the race make the starting gate, there will be at least seven berth-holders looking to strike a deal. The owners of open berths will face “no restrictions on how they market, sell, or otherwise convey or lease their entry spot,” the Stronach Group’s Rogers said, in the company’s responses to Daily Racing Form’s questions. That could lead to some creative deals, and even the possibility that some berths might change hands multiple times.

Jeff Weiss, a berth-holder who runs under the name Rosedown Racing, said he is looking forward to the deal-making. Weiss, whose best horse from a small stable has been Grade 3 winner Bashart, is a real-estate investor in Florida who does not currently own a horse that would fit in the race.

“I like the idea of networking with these guys,” Weiss said. “That could lead to other opportunities. Who knows what this could lead to? It could open all kinds of doors.”

All of the buyers who do not have a horse for the race said that they have not yet had any formal discussions with specific owners about a deal, though some said they have put feelers out. The real deal-making, they said, is expected to start after the Breeders’ Cup in early November, when the top ranks of the handicap division will be better sorted.

The most direct approach to fill the slot would be to buy a horse that could compete at a top level. But a racehorse that is capable of winning a Grade 1 race could cost millions of dollars, especially if the horse is a colt whose breeding value would increase markedly in the case of a good performance. In addition, owners of such a horse would be unlikely to sell the horse outright if the horse has a reasonable chance to win, not when there will almost certainly be a surfeit of Pegasus berth-holders who will be looking to sell their slots or strike a deal favorable to the owner of the horse. The stakes to fill the slot will be high – if a slot owner does not start a horse, there are no refunds, Rogers said.

Citing the likely surplus of open berths, most of the owners of the slots acknowledged that they will likely be facing a buyer’s market as the race approaches. The math for the owner of a top-class horse considering the purchase of a slot is pretty simple – if the horse is expected to be 6-1 on the morning-line or lower, the owners would face a reasonable expectation of return on spending $1 million to purchase the slot (disregarding the potential revenue from handle and sponsorships).

What makes that math daunting for berth-holders looking to strike deals is that likely no more than four horses will be expected to be lower than 6-1 in a race with a 12-horse field. That will drive down the price for a starting slot for the horses that are expected to be higher than those odds, though the risk is mitigated somewhat by the guarantee that every horse in the race will earn at least $250,000.

“If you’re the owner of a horse that is in phenomenal form, and it looks like you are going to be the big favorite, then you’re going to be able to squeeze four or five guys and get a really good deal,” said Kumin, the hedge-fund manager, who has an ownership interest in Preakness and Haskell winner Exaggerator.

Duncan Taylor, the president of Taylor Made Farm, which has a 30 percent share in California Chrome and in the berth bought by the partnership that owns the horse, said the ownership group is hoping California Chrome stays in form. After wins in the Dubai World Cup and San Diego Handicap this year, California Chrome is considered the best horse in training in the U.S., and if the Pegasus were held next weekend, he would almost certainly be the heavy favorite.

“If he can’t make it, it won’t be easy to sell the share,” Taylor said. “If you don’t fill the berth at all you are definitely going to lose 40 percent or 50 percent of the money you put up, at least, so you are going to sell it to somebody, whether you can get whole or not.”

Reddam, who earned a Ph.D. in philosophy and made a fortune in an on-line lending business that has often been criticized for high interest rates, said that shrewd deal-makers may have an advantage in the market for berths.

“Generally speaking, everyone in racing thinks his or her horse is a lot better than the horse actually is,” Reddam said. “That’s going to lead to some crazy deal-making. That’s really the element that I am going to find most interesting. And really this game could use something like that, something that shakes things up. People may get really creative out there. It could be a fun thing to be part of.”

Revenue sharing

While only one owner will have the chance to win $7 million, every owner who has secured a slot will have a one-twelfth share in several revenue sources from the race. According to the Stronach Group, the agreement states that the initial buyers will share in the “net revenue” from the handle on the race and all “net sponsorship revenue and any net revenue received from the sale of TV or other media rights from the race.”

Buyers said that the Stronach Group has declined to provide estimates for the amount that might accrue to the owners from the various revenue sources. However, the company did acknowledge that the buyers will not share in any revenue from a television deal this year, because the company would not be able to sell any television rights to the race in its first year.

“The Stronach Group felt that it was important to broadcast this race on a major network so we are currently working with a major U.S. network to finalize an agreement of which The Stronach Group will be responsible for any costs associated with the production,” Rogers said.

It is possible that The Stronach Group will be able to sell several sponsorships attached to the race, but the net revenue from those deals are unlikely to exceed a total of several hundred thousand dollars, said racing executives who spoke on the condition of anonymity. The only big-money sponsorship deals in racing are for the Triple Crown races, which can promise large television and on-track audiences, the executives said.

As for handle, it is difficult to estimate what any new race will generate in wagering revenue, but the makeup of the Pegasus field will likely play the most significant role in determining the level of gambling interest in the race. For that reason, it’s not impossible to believe that the Pegasus will attract as much wagering as the Breeders’ Cup Classic, which last year had handle of $28.6 million (including all horizontal bets paying off in the race), even if that figure is a best-case scenario.

Rogers said that it has not yet been determined if horizontal bets such as the pick 4 or the Rainbow 6 – a jackpot-style bet that has led to multi-million-dollar carryovers at Gulfstream – would be included in the revenue shares for the Pegasus slot owners. “This is an open issue that still needs to be resolved,” Roger said, noting that it may be worked out at the Aug. 8 meeting.

The rule of thumb for the track’s share of betting on a single race is five percent, a figure that attempts to account for the difference between the host track’s share of on-track and simulcast wagering and the contractual split of wagering revenue that must go to horsemen at the track. If the Pegasus handle figure equals the betting on the 2015 Breeders’ Cup Classic – in which Triple Crown winner American Pharoah made his final career appearance – then the 12 owners would share in approximately $1.5 million in revenue, or approximately $125,000 each.

Stronach Group officials did say that they planned to sell the race to simulcast sites at a higher rate than that in place for Gulfstream’s other races, under a clause in the track’s simulcast contracts allowing for a “premium signal fee” for special events. Still, that is unlikely to push the rate up to anything approaching a Triple Crown race or the Breeders’ Cup, which typically command rates equal to half the revenue from wagering, because the Pegasus does not yet have that kind of cachet.

Most of the buyers of Pegasus slots said they were undisturbed that the net revenue shares from the race were unlikely to amount to more than 15 percent or so of the initial purchase price. And that is because all said that they expected the race to become far more successful in the future.

“This could be something real big,” said Mick Ruis Sr., the ex-trainer who bought a slot. “That’s kind of why I got into it. It’s like when they started the NFL and people got in on the ground floor. I look at it as an opportunity. Will we get it back right now, this year? I don’t think so.”

“In the long run, this is going to be a really big race,” said Weiss. “The first year, it will probably not do so good, but I’m looking at this as a long-term investment. I’m not looking at this as a one-year deal. Frank Stronach is a big, big success. He’s proven it. He’s got the Midas touch.”

Largely through the success of his auto-parts company, Magna International, Stronach, has amassed a fortune estimated by Forbes at $1.6 billion (for the past several years, Forbes has relied on a Daily Racing Form reporter to provide estimates for the value of his racing holdings). However, Stronach’s history in the racing business is far less stellar. The Stronach Group, which is owned by a family trust, is Stronach’s third try at consolidating racing assets under one roof; the other two companies, both publicly traded, went bankrupt, burning through $1 billion in shareholder money.

Mystery investor

Of all the questions surrounding the first running of the Pegasus, none are perhaps more interesting than those involving the purchase of a slot by a man named Dan Schafer.

In an interview several weeks ago, Schafer said that he is a 32-year-old Michigan native who moved nine years ago to Northern Kentucky, where he currently lives with his wife and children. Schafer said that he owns eight pizza franchises – five in northern Kentucky, and three in Michigan – and that he became an avid fan of horse racing 15 years ago. He regularly visits the tracks in Kentucky, he said, and went to his first Breeders’ Cup in 2011 at Churchill Downs. He also said he regularly goes to Gulfstream when visiting Miami in the winter.

He also said that his $1 million commitment to buy a Pegasus slot was the first money he had ever spent in racing. He is the sole investor in the slot he purchased, he said.

In the interview, Schafer demonstrated detailed knowledge of the handicap division, citing several horses owned by Stronach that had a chance to move up in the handicap ranks in upcoming races. He also said that he decided to purchase the slot after talking to several trainers at Gulfstream, but when asked to identify the trainers, he said he did not know their names.

“They were just guys hanging out by the paddock, like they all do,” he said.

Schafer started a Twitter account just after he was identified as one of the buyers of a Pegasus slot, with the handle @DanSchaferPWC. The account has been used exclusively to publicize the Pegasus. DRF used the Twitter account to contact him, since his name does not surface in detailed Internet searches, with the exception of a reference to the ownership of a single pizza franchise, Original Buscemi’s, under a Michigan company of which he is president.

Schafer said that he has considered buying racehorses in the past, and he also said that the Pegasus slot is likely only the first in a string of investments in the racing industry.

“For me, it’s not about making money,” Schafer said. “This is horse racing. I jumped into it a little backwards, but I looked at it as a business opportunity. You’re going to see this race become a very special day. I have a lot of respect for Frank Stronach, and you know him and his people are going to make this an amazing day.”

Schafer said he has never met Stronach, anyone in his family, or anyone at the company, at least prior to signing the deal to purchase the slot. He also said he does not know how he will fill the slot, but he said he expects to be flooded with offers from owners of top-class horses.

“I think it’s too good to be true,” he said. “You are going to see a lot of horse owners want to have a share in this.”

Following the interview, Schafer was asked through his Twitter account if he could provide a photo. He did not reply to the request.

Too much skin

While none of the current investors expressed any ambivalence about the decision to purchase a slot, there were some potential buyers who declined offers from Stronach Group officials to buy in. One was Mike Repole, the New York based owner and breeder who likes to play at the top of the game.

“I loved the idea of a big purse, it makes it exciting, and I think the richest race in the world should be in the U.S.,” Repole said. “But, for me, I just don’t like the idea of owners funding the purse. As owners we’re buying these horses, we’re paying for these horses to be trained, we’ve got all these bills, and now we’re paying for the purses too?”

At the same time, there are a number of owners who, come December, will be looking for a shot at a $7 million payday, and at least one owner is going to walk away with the largest racing purse in history.

The owners of the slots also seem to accept that in horse racing, the game is expensive to play, and there is no such thing as a sure thing.

“In a business sense I’ve yet to be able to justify just about anything I do in horse racing,” said Reeves. “You have to be a little out of your mind to do what we already do in this business.”

“You have to hand it to the Stronach folks, because you have all the owners paying all the expenses for your fancy day,” said Reddam. “That’s not a bad deal for them. For us, it’s like a poker game. Everyone has anted up, and then, if it’s like most poker games, at the end of the night one guy has almost all the money.”

The marketing maxim is any publicity is good publicity. But the brains-trust at Racing NSW and the Australian Turf Club (ATC) must be concerned at the mixed reaction to yesterday's bombshell announcement that Sydney will stage the Australia's richest-ever horse race in the middle of Melbourne's marquee Spring Racing Carnival.

Melbourne's racing mandarins are playing sanguine but you can bet "Flemington to a brick" that they will soon return fire and move to secure The Cup's erstwhile status as Australia's richest horse race.

Unlike the allegedly egalitarian Melbourne Cup, which despite Lloyd Williams' best efforts is embraced as the people's race, the Everest is being openly marketed as the exclusive plaything of Sheikhs, robber barons and titans of inheritance.

The brochure boasts it will be "the most exclusive thoroughbred racing event held in the southern hemisphere".

Mounting yard access "will be the exclusive domain of the elite players of Australian and international racing." Not much sympathy there for the mug punter, whose taxes on wagering ultimately pay for the whole show.

The Everest's $10m purse will be initially funded by owners who can afford a lazy $600,000 entry fee, for three years in a row. If your runner finishes out of a place, you cop a $425,000 loss on the chin.

If you can afford such a gamble, the first prize of $5.8m is likely peanuts. The equation is not 'which is the country's best sprinter?', but 'which owner can afford a runner?'.

The slots will be decided by Racing NSW and the ATC after they take expressions of interest, which they will then vet for probity and integrity.

Once secured, the slots — effectively the right to have a runner — can be openly traded; sliced and diced as the market will bear.

But again, with integrity paramount, every deal must be vetted and approved by the racing authorities. Tellingly, Racing NSW is yet to set down the criteria by which it will allocate slots and if the race is over-subscribed some are already predicting legal risks among racing's notoriously litigious fraternity.

Racing NSW is trumpeting the fact that the race is "self-funded" and no existing revenue from racing will go towards the prizemoney, but will this merely be a test of owner's wealth rather than thoroughbred class?

The central idea is that "market forces" will prevail in the slot deals and will guarantee the best possible field of thoroughbred sprinters lines up on race day.

Then again, for turf purists, genuine contests of thoroughbred class take place over classic distances from a mile to 2400m.

Does racing need another marquee sprint event? Connections of Australia's champion racehorse, Winx, say the mare won't be there, though that hasn't stopped bookies putting her on top of their speculative "futures" market at 7-1.

And Australian breeders too are privately sceptical. For decades they've been seeking to broaden their international appeal beyond Australia's reputation as the home of speedy squibs scampering over short courses, a legacy of the get-rich-quick influence that the two-year-old scamper of the Golden Slipper has had on the local breed.

The concern is The Everest could skew the yearling market back to square one.

The entire concept is based on the $12m Pegasus World Cup, run in America last weekend, but the packaging of the Everest smacks of get the marketing out now and work out the finer details later. Racing's privileged place in Australia's sporting psyche has been built up over more than 150 years.

The great stories around racing's dramatis personae — the horses and the people that tend them — are what drive the public back into racing's corner, not huge prizes shared among a privileged elite.

Under ever increasing threat from competition of entertainment alternatives, is the Everest the right package to reverse racing's fortunes and recapture the public's imagination?

The vast majority of owners/horses wouldn't make the field. Those considered have probably won a fair bit of prizemoney already.

Anyway, I think a few of you need to familiarize yourself with the format. I don't think the rules are what you think it is:

Twelve slots will be sold in The Everest through an expression of interest entitling the owner of the slot an entry in the field. The owners of these slots will be able to trade their position or alternatively partner with owners not holding a slot to enter a horse in the final field for the race.

If you own the most overhyped race all year why not try to slot in the second most overhyped as well? Keep trying little brother.

What is the most overhyped race in Australia?

I would have thought it is the Melbourne Cup. $6.2 million for a B Grade handicap making out to the non punting public that it is the best race in Australia? You cannot get more hyped than that. Prince Of Penzance won it FFS. Winx could probably give it 10 kg over 3200m and beat it by 20 lengths.

It is about time we started challenging some of the hype with new ideas.

Geez. All these geniuses who know how it will turn out before it is even run.

I seem to remember The Championships getting the same belting from similar people.

There is no need to worry about anyone being excluded, the best sprinters in the country will find a place in the field. Studs and large corporations and or wealthy people will buy the slots.

They will then give them, sell them or profit share them to the owners.

Why wouldnt a company like Myer buy one, approach someone like Bryce Hayes and Speith on a 50/50 contingency. Speith is racing for 3 million to the winner for no entry fee. Myer then have silks in their corporate colours, invite their clients along and receive publicity in the lead up to justify the spend

Seems as good a way to spend 600K and get bang for their buck as spending it on sponsoring races as they currently do..

They just have to wait cap in hand hoping for a deal like something Anti has suggested.

Can't wait to see that horse crossing the line in front wearing B365 / Ladbrokes / Sportsbet silks

Mate the owners of Malaguerra and Speith will not be waiting "cap in hand". Quite the opposite.

This is why Manny Gelagotis is so happy.

As the manager of (possibly) the best sprinter in Australia, people will be lined up wanting to negotiate with him for sponsorship before committing to a spot. He is in a position to drive a hard bargain, and will not be putting in one red cent.

We believe one of the great aspects of it is that it has so many stories that can go with it. Let’s say I’ve got a great horse but I don’t have a slot; I’m going to negotiate with someone, or even I’m just an investor that’s never had a horse that goes into Japan and gets Japan to come to Australia at that time, and they share the prizemoney with those people. They’re the sort of stories you want to generate out to the media, and that’s why we love the concept. The first box has been ticked, it’s got enormous media coverage here in Australia, so now we’ve just got to get the 12 slot holders and go from there.

There are a lot of commentators who are writing negatively who don't appear to understand it.

Take Michael Cox from the South China Morning Post in his very negative story. He obviously doesn't have a clue:

What if a Takeover Target-like fairytale comes along in The Everest-era? What does his owner do, start a Gofundme.com page or take out a second mortgage to try and come up with the cash?

They don't seem to get the fact that owners of the best sprinters will negotiate with slot holders and if you have/had a very good horse like Takeover Target you are in a very strong negotiating position to the point you are unlikely to pay any entry fee.

And as I guessed, the date is carefully chosen so that the added bonus for an overseas horse to come out is that there is some very rich races in Melbourne soon after - from the Q&A.

We believe it’ll compliment the Victorian spring carnival because of the 1200 metre distance we’ve put it as. Two weeks later there’s a race at Moonee Valley for A$1-million [G1 Manikato S.], and there’s a race at Flemington for a further A$1-million [G1 Darley Classic] two weeks later. If a horse did come from overseas, not only can it run in the A$10-million Everest, but it can also run in the Manikato and then in the Darley. So it could assist the Victorian Spring Carnival in getting international sprinters. Yes, it clashes with the Guineas, but that was the date we had to place it on to get the maximum media exposure.

In fact if the concept works I'd be surprised if the VRC didn't adopt the idea itself. If there is a lot of interest for the available slots, maybe in (say) 5 years time we have two $10 million races at Randwick (1200m and 1600m) followed up with another two $10 million races at the Flemington carnival (1200m and 2000m).

TDN Q&A With Peter V’landys

By Kelsey Riley

Royal Randwick racecourse in Sydney, Australia will host the world’s richest 1200-metre race and richest turf race on Oct. 14 with the inaugural running of the A$10-million The Everest. An initiative of Racing NSW and the Australian Turf Club, The Everest–which will be a weight-for-age race for 3-year-olds and up–will also be the richest race in Australia, dwarfing the A$6.2-million G1 Melbourne Cup. The Everest follows in the mould of The Stronach Group’s GI Pegasus World Cup, in that the 12 starting spots are available to purchase, for A$600,000. The purse will be fully funded by the entry fee as well as additional revenues generated from the event such as wagering, sponsor and broadcast revenues as well as other raceday revenues, and all profits will be distributed among the slot holders.

TDN International Editor Kelsey Riley caught up with Racing NSW Chief Executive Peter V’landys on Thursday to delve deeper into The Everest.

KR: The Everest is very much in the mould of the Pegasus World Cup. Was that the inspiration for the race?

PV: Absolutely. We thought the Pegasus was a great concept and we take our hats off to The Stronach Group for being pioneers and innovators. What we liked about it more than anything else was the marketing potential for Thoroughbred racing to a broader audience. I think The Stronach Group has achieved that because they got enormous coverage for racing in America that they would not normally get. Every effort they’ve put in will be rewarded, because it’ll have ongoing benefits to the branding of Thoroughbred racing in America.

We picked it up in a similar vein. We wanted a vehicle to promote Thoroughbred racing in New South Wales. We used the concept, and once we announced it we had racing on the front page of newspapers, and the lead story on free-to-air TV networks, so it achieved exactly what we were trying to do: promote racing to a bigger audience and take up some media space.

Ours is slightly different to the Pegasus–we’ve tailored it for us. We’re putting the money in which is the shortfall, that’s guaranteed. The holders put in A$7.2-million and we put in A$2.8-million, which is what we generate from sponsorships, wagering and other revenues, and any incremental revenue we get we will put into the race. In actual fact it’s only costing the slot holder A$425,000, because they’re guaranteed to get A$175,000 for running last.

(Editor’s Note: the prizemoney breakdown of The Everest is as follows: the winner will receive A$5.8-million, with A$2.4-million to second, A$800,000 to third, A$400,000 to fourth, A$250,000 to fifth, and sixth to 12th A$175,000)

The only difference with the way we’ve done it is that people have to commit themselves for three years. We want to make sure we’ve got the race, once we build the brand, and we’ve got the charisma of the race and the concept.

We believe one of the great aspects of it is that it has so many stories that can go with it. Let’s say I’ve got a great horse but I don’t have a slot; I’m going to negotiate with someone, or even I’m just an investor that’s never had a horse that goes into Japan and gets Japan to come to Australia at that time, and they share the prizemoney with those people. They’re the sort of stories you want to generate out to the media, and that’s why we love the concept. The first box has been ticked, it’s got enormous media coverage here in Australia, so now we’ve just got to get the 12 slot holders and go from there.

KR: What did you learn, both positive and negative, from the first running of the Pegasus that you think can help make your event a success?

PV: We love the concept about the slot holders. The negative was that they came across two champion horses in California Chrome and Arrogate, but that’s going to happen. That’s why we decided to make it 1200 metres for us here; there’s a massive pool of sprinters. We wanted to get a distance that wasn’t going to be dominated [by a couple of horses], so I guess the little weakness in the Pegasus–although there is no weakness because it’s a fantastic concept–was the fact that they were unlucky that there were two very good horses.

On the positive, they marketed it brilliantly. They got racing back in the media. I just think they’ve done a wonderful job, I take my hat off to them. This is what American racing needed. It was on a massive decline, to be realistic. It started with American Pharoah that generated enormous publicity, and The Stronach Group, which is very innovative, have taken advantage of that fanfare that was generated by American Pharoah with this concept.

KR: While the Pegasus was placed in a spot on the calendar that wouldn’t conflict with other major race meetings, The Everest has been placed in the heart of the spring racing season, and namely on Caulfield Guineas day. Why was this date chosen?

PV: One of our main objectives was to promote the sport to a broader audience. In order to do that you need to get as much media attention as possible. That period of time there is no competition. Our rugby league, which is one of the main sports, and the AFL have finished their seasons. It’d be like the basketball and the gridiron finishing their seasons in America, and there’s a lapse where you’ve got the chance to promote. That day there is no other major events on, and it was the best day to get that promotion.

We believe it’ll compliment the Victorian spring carnival because of the 1200 metre distance we’ve put it as. Two weeks later there’s a race at Moonee Valley for A$1-million [G1 Manikato S.], and there’s a race at Flemington for a further A$1-million [G1 Darley Classic] two weeks later. If a horse did come from overseas, not only can it run in the A$10-million Everest, but it can also run in the Manikato and then in the Darley. So it could assist the Victorian Spring Carnival in getting international sprinters. Yes, it clashes with the Guineas, but that was the date we had to place it on to get the maximum media exposure.

In the future we’re going to possibly look at running it on a Friday night under lights at Randwick. It’s not always going to stay where it is, we just needed to find a day where we could get some publicity and that was the day we selected. That’s one of the reasons we also selected the distance, because it does compliment the racing calendar.

KR: And I understand it took some time for you to decide on that distance for the race?

PV: We looked at all the distances. We’d been working on it for four or five months to get it right. We did market analysis, we consulted people, and it was very unusual for us over here that it didn’t leak out to the media. It was the best kept secret in racing. Yesterday it was on the front page: racing bombshell. It has a charisma all its own, this race, and that’s why we called it The Everest: the peak, and it’s got so many marketing components, it’s great.

KR: Whereas the Pegasus was placed to allow colts to get to studs in time for the breeding season, the placement of The Everest makes it so colts wouldn’t be able to retire to stud and cover a full book. Was this taken into consideration, and do you think this could be a positive for racing’s image by keeping star colts in training longer?

PV: It’s a positive for us because one major investor has come out and said they may keep their horses going for another 12 months rather than taking them to stud, which for us as the racing industry is great, to have those great horses still racing is a benefit.

KR: The Everest won’t be a black-type race in its first year. What is the process for receiving black-type in Australia, and subsequently reaching Group 1 level?

PV: We’ve haven’t made an application for it at this point. We wanted to get the concept up and going and then look at group and listed [status]. To the general public it doesn’t matter if it’s a Group 1; for the purists and the trainers and the stud books, etc, it does, but for us we’re using this for marketing. The normal person wouldn’t really know what a Group 1 or a maiden is. So we decided we’ll establish it, and then we’ll look at making it a Group 1 race in the future.

You’ve got to establish the race first and foremost and you’ve got to get the ratings. I think in America they swapped an existing Grade I race [the Donn H.]. We haven’t really looked into it too much here because we were just ensuring the concept worked first and foremost.

KR: And you’ll consider selling more than 12 slots if the interest is there?

PV: Correct. And what we’d do is put it back into the prizemoney. So if we were to sell two more slots it would become A$-11.2 million. And naturally we’d do that in agreement with the other slot holders, because we wouldn’t want someone thinking it’s 12 and then it goes to 14. We always want to be transparent.

KR: How much interest have you had from potential investors thus far, and did you float the idea past industry stakeholders before announcing it to test its viability?

PV: We’ve had a number of people seeking to be included in the expressions of interest, which is great. We haven’t even gone out on the road yet. It’s a very positive response. We analysed it with a couple of major players and they were extremely positive and thought we could sell the 12 slots quite easily. We did the market analysis and consulted in people we could trust that it wouldn’t leak out and they kept our confidence, including some of our leading trainers, owners and others.

KR: Australian sprinters have always been expected to travel overseas to prove their mettle. Do you think we could see the reverse here, where the best sprinters from other nations come to Australia for the world’s richest sprint race?

PV: That’s what we’re hoping. We’re better on our home ground. We go pretty good traveling but when you’re on your home ground you’re even better, aren’t you, so it’s about time they started coming on our home ground. And then we’ll beat them here as well!

KR: You said in your comments announcing The Everest that it would help promote racing to a wider audience. Are there marketing plans already in place to reach mainstream audiences?

PV: We’ve put a budget aside naturally for The Everest, and we will promote it in a big way. The beauty of the race and the concept is that it will generate its own publicity. We’re big into the social media and we’re investing a lot in our social media. For example LinkedIn, which is all the professional people, we’re going to market very hard through there. They’re the ones that have the higher disposable income and they’re the sort of customers that we’re looking to get into racing.

KR: You touched on it a little bit already but the race name, The Everest–how did you land on that?

PV: What’s the peak? We looked at The Pinnacle, we looked at a couple other things, and we said what’s the highest peak? The highest peak is The Everest–you’ve got to climb The Everest to get there. There’s a saying in Australia, if something’s too hard, you say it’s like climbing Everest. The peak of racing is going to be The Everest.

Ours is slightly different to the Pegasus–we’ve tailored it for us. We’re putting the money in which is the shortfall, that’s guaranteed. The holders put in A$7.2-million and we put in A$2.8-million, which is what we generate from sponsorships, wagering and other revenues, and any incremental revenue we get we will put into the race. In actual fact it’s only costing the slot holder A$425,000, because they’re guaranteed to get A$175,000 for running last.

(Editor’s Note: the prizemoney breakdown of The Everest is as follows: the winner will receive A$5.8-million, with A$2.4-million to second, A$800,000 to third, A$400,000 to fourth, A$250,000 to fifth, and sixth to 12th A$175,000)[/html]

Love how PV said it will be self funding but then says it's from various forms including wagering

Love how PV said it will be self funding but then says it's from various forms including wagering

$2.8 is a fair wedge to make up.

It's the sort of race, if the concept works (let's not forget it is an experiment), but if it works the corporates will market it to the international wagering audience.

Especially if you can attract a few international sprinters to come out - not just for this race but you have the rich sprints in Melbourne following up which could be an added incentive.

There is a new paradigm with wagering in Australia. A lot of us, me included, were brought up punting in the 70's and 80's where it was all tote wagering except if you were on course (SPs didn't exist ). There was an agreement between the states that the takeout for any money wagered on an interstate event was kept locally. And the other thing was that sponsorship of races was rare and did not contribute to the prizemoney that much.

This has changed almost overnight. Those that have the quality product get the rewards now. You need initiatives like this to improve your product.

Magic Millions is a runaway success, but all the prizemoney for raceday is "private money", as are the Inglis races and most of the prizemoney at the Scone Cup carnival. And things like Pegasus and Everest are not a dissimilar ideas.

I think we have to get used to this sort of thing. Racing Administrators have to look for new ideas to improve the quality of their product offering for the purpose of increasing the wagering volume to a new global audience.

For those that don't understand the concept, especially some of those mainstream journalists who have been extremely negative with their "uninformed" statements, it explains it all.

Some of the points noted in the interview:

- The cost is $425,000 per year per slot if you consider that last place gets $175k- The date was deliberately chosen to compliment the Melbourne Spring carnival sprints, specifically the Manikato and the Darley.- Gauging by the initial enquiries, the demand for slots will far exceed the supply and as we suspected, Racing NSW had done their homework beforehand- PV makes the very good point that syndicates will think nothing of spending $425k at the sales and often get no return, so statistically a $425k investment in The Everest is probably a far better deal.